O-I Glass Inc (OI)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 356,000 | 37,000 | 166,000 | 249,000 | 392,000 | 849,000 | 1,031,000 | 1,132,000 | 1,000,000 | 1,038,000 | 879,000 | 754,000 | 532,000 | 466,000 | 718,000 | 452,000 | 601,000 | 696,000 | -195,000 | -14,000 |
| Interest expense (ttm) | US$ in thousands | 335,000 | 331,000 | 322,000 | 353,000 | 343,000 | 328,000 | 313,000 | 241,000 | 239,000 | 238,000 | 225,000 | 231,000 | 216,000 | 206,000 | 217,000 | 263,000 | 265,000 | 308,000 | 330,000 | 300,000 |
| Interest coverage | 1.06 | 0.11 | 0.52 | 0.71 | 1.14 | 2.59 | 3.29 | 4.70 | 4.18 | 4.36 | 3.91 | 3.26 | 2.46 | 2.26 | 3.31 | 1.72 | 2.27 | 2.26 | -0.59 | -0.05 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $356,000K ÷ $335,000K
= 1.06
Based on the data provided, the interest coverage ratio of O-I Glass Inc has shown fluctuating trends over the quarters.
The interest coverage ratio is a measure of a company's ability to meet its interest payments on outstanding debt. A higher ratio indicates that the company is more capable of meeting its interest obligations.
From March 31, 2020, to June 30, 2021, O-I Glass Inc had a negative interest coverage ratio, which implies that the company was unable to meet its interest expenses from its operating income during those periods. This indicates a high-risk situation regarding debt servicing.
However, from September 30, 2021, onwards, the interest coverage ratio started to improve, reaching above 1.0, which indicates that the company's operating income was sufficient to cover its interest expenses. This improvement suggests a better financial position and debt-servicing capacity for O-I Glass Inc.
The interest coverage ratio continued to increase steadily from March 31, 2022, reaching its peak at 4.70 on March 31, 2023. This upward trend reflects a strengthening financial position and increased ability to cover interest payments comfortably.
However, from March 31, 2023, onwards, there was a decline in the interest coverage ratio, dropping to 0.71 on March 31, 2024. This decrease may raise concerns about the company's ability to cover interest expenses adequately during that period.
Overall, the analysis of O-I Glass Inc's interest coverage ratio indicates a mix of weak and strong performance over the quarters, with improvements in recent periods followed by a slight decline. Monitoring this ratio is crucial to assess the company's financial health and its ability to manage debt obligations effectively.